Liftoff at the end of a difficolt year is unhappily locatedthat said, it's clear that china growt isn't imploding and cny not on the verge of a big devalutaion.from the dip of 15 dec 2014 to the high of 5th dec 14 the recovery was 14% and the subsequent correction 5%. from the low of 9th sept 15 to rhe high of 3rd nov 15 it has been ah 13% rally. i guess around -5% overall could be the target this time..... 2000 area....

Next time MM is in the City late he should bag the commute and elect to crash at LB's new Downtown pad where he can enjoy the scenery for an hour or two. As one of LB's dear friends is wont to say, "It's all out, mate. Every night".

LB reviews the overnight action and notes that we have that correlation again. Higher EURUSD, lower Spoos and long end rates. Higher EURUSD is again a signal for risk-off trade, while higher USDJPY is the risk-on FX proxy du jour.

LB has also been fancying gold for a bit, and more specifically the GDX, but our 'NADS aren't quite as big as MM's so we are still just watching that one for now, which is why we just weaseled into some fixed income for a bit instead.

There are some signs of an imminent short squeeze building in US10y, and watching the shorties squeal is always fun when one is long the underlying. Not that we ever enjoy the pain of others, you understand....

MM, you must get a fold up bicycle. I bought one of these last month for very small sum and it fits in the boot of my car quite well. Very good for parking near the city and cycling the last 2km or so or when the traffic gets bad. Hopefully your jury duty is not for a 6 month murder trial. You could try to get excused by saying you are a gambler/trader. I think they have a let off for people with medical illness, mental retardation or gamblers and traders ?

I have been having fun building a long on usd.cnh. The spread and leverage available is not as a bad as I thought. I plan on buying usd.cnh on any weakness. The risk-return profile is very largely asymmetric. One day, there is a good chance of serious payoff and in the meantime you can still generate a decent return on trading the range if you so desire.

The probability of a usd.cny rally back to 6.3 in the next year is low (my subjective probability less than 10%), risk is 1.6%. Probability of peg break of at least 6.6% in the next year is high. Risk : reward > 4 and more importantly probability weighted risk : reward appears to be excellent.

I have 50% of the position on now and intend to fill the next 25% after retail sales today and the last part of the position a few days before the ECB.

Bank flight...BBG: European banks are on the retreat all across Latin America. Societe Generale SA announced in February that it’s dismissing more than 1,000 workers while exiting the consumer-finance business in Brazil. In August, HSBC Holdings Plc sold its unprofitable Brazilian unit, with more than 20,000 employees. Two months later, it was Deutsche Bank AG’s turn. The German lender said it’s closing offices in Argentina, Mexico, Chile, Peru and Uruguay and moving Brazilian trading activities elsewhere. Barclays Plc is shrinking its operations in Brazil too.

Until commodites go back into thier old range, HY is gonna be suspect. I dont see how these new mega deals are going to get done, like SAB, but anyways

From Moodys

The final quarter of 2015 is shaping up to be the second straight quarter of substantially fewer high-yield rating upgrades relative to downgrades. A convincing negative trend may be emerging. As long as high-yield downgrades well outnumber upgrades, any extended narrowing by the high-yield bond spread is suspect. For example, first-half 2007’s narrowing by the high-yield spread amid a distinctive upturn by net high-yield downgrades would prove to be a big mistake

Lipper reported an outflow of $1.8b from high yield funds for week ended November 11, first outflow in more than five weeks

With commodities in a death spiral, emerging markets recoiling into recession, stagnant wages and worker productivity at an almost all time high, what's pushing inflation...anywhere? Airfares are not dropping, grocery bills are going up and rents are astronomically high, and rising, and Janet's about to push the big red button on interest rates. This is insanity.

That is not the probability of saudi defaulting. CDS price does not reflect actual probability of default.

Ok now you've got me out of the woodwork . I can't say Im that sad to see the market roll over having been waiting for a couple of weeks. But I am pretty clueless to the fine tunings. It seems to be a game theory pay off chart with the 2 axes being market expectation of ECB and FED movesFor Hawkish Dovish and Neutral Fed first, ECB second - We went from HN to DD And now at HD And in general HH and DD are equity trades and DH HD are FX trades.

Just waiting for ECB to sound less dovish or do the doings to max out the current sell off and then we can buy again.

Just thinking about the chances of any EM trying QE. With their own domestic stuff they d be buying back having such terrible credit ratings there could be some amazing credit arb plays.

Daech claimed 4000 of their 'soldiers' penetrated Europe this summer amid the massive flow of refugees. It might not have been bluff, but a devastatingly simple strategy. We have nukes, they have undetectable, dormant individuals just waiting to resurface and gun down 20, 30 civilians each. They win and we, the civilians lose. The only safe Westerners are the VERY politicians responsible for this mess, protected by their little army and now uttering big, big words of anger. You better show us you really want to fight this for anywhere in the European public space has become quite hazardous.

I grew up in Marseille, a model for the French melting pot. I am afraid mentalities are about the change

I see the Paris attacks like 9/11. It is to draw out a responds from France which benefits whoever planned it. Counterattacks against Muslims could get a nasty spiral of violence going in France. Or France could be sucked into the civil wars in Syria and Iraq.

"what bad choices can yield for a crop."As far as I am concerned the only bad choice is the one Western politicians keep refusing to make. That is, if you are in a fight to the death with extremists then be prepared to be even more extreme than them if you really want to win.

Sunni and Shia have killed each other for almost 1400 years, when Americans were still Apaches and Comanches and Brits and French were busy almost exclusively hating each other.

Arabs had noone to blame for their mess but themselves until the USA and Europe (to a lesser extent) started to mess with the region. Now it's all too easy to blame everything on the usurpators

so today we (the West) have to choose between two routes:

- we either completely pull from the region, stop the cascading effect, let them rape and kill each other, and aim at finding the missing oil somewhere else

- we go all nuke and nasty. Cheney had established it would take 17 warheads to wipe out the Iraki National Guard back in those days (cf. Bush senior new autobiography), i trust they have updated and extended their guesstimate to the entire region. If not they can get the figure from the Russians who are plenty ready to go nasty and do not give a flying fuck about 'pretending' to be nice and caring to the world.

who knows perhaps they'll do the dirty work for the West while Americans and Europeans look the other way.

In conclusion: if you nuke every known stronghold of extremism, the Arabic states will think twice before renewing their hospitality to such troublemakers. If it was not already an international law, to make harboring extremists completely illegal then it will briskly become one de facto and they will be avoided like plague.

I disagree completely with your view. Perhaps you can explain all the Islamic murderous rampages all over the world since 1981:

List of Islamist terrorist attacks

https://en.wikipedia.org/wiki/List_of_Islamist_terrorist_attacksKenya, Nigeria, Mali, the Philippines, China, ...what did those people do to deserve their fate?

In the meantime, Islamic terrorists f*** with us while we pretend western powers meekly accede and view the slaughter of Christians and Yazidis and other innocents in a far away distant drug ladened stupor.

LB lived through the IRA bombing campaign in London in the 1980s and was close by when the Harrods bomb exploded on December 17, 1983. In those dark days, despite the prevailing ethos of Keep Calm and Carry On, Londoners lived in constant risk of the car bomb and the grenade tossed in the rubbish bin, and the only truly safe place was probably in a pub in Holloway with a Guinness in hand. France, especially Paris, is likewise a sitting duck for Islamic terror b/c of the integrated nature of its population. You can't lock up every Algerian, Tunisian and Moroccan in Paris, any more than the UK was able to intern every Irishman in London. This is the nature of modern multi-cultural societies. Even the modern security state will have difficulty doing battle with lone wolf terrorists and sleeper cells. Parisians will learn to live with this, perhaps for a decade or more.

LB: "You can't lock up every Algerian, Tunisian and Moroccan in Paris, any more than the UK was able to intern every Irishman in London."

Europe is weak, aging rapidly and unstable. They are in the early stages of their own demise. They can not even get together a solve their financial crisis nor the brazenness of the Russians.

The people of France should not delivering flowers and lighting candles. They should be lining up to purchase weapons.

We are past the point where this can be resolved by "locking up" any one.

What you fail to understand is that these people are capable of almost anything. They are not constrained. They have no rules of engagement. They have their our own way of dealing with enemy combatants. They have told you that their goal is to destroy you, along with everyone else in the West and every Muslim who refuses to accept their version of Islam.

Mass shootings in civil society, sadly, it's unlikely to be the last time this sort of thing occurs.

In terms of market effect, I wonder if there will be any on the Euro or oil. Dollar Long appears to very popular now and one wonders whether anything could be trigger a short covering rally. If not next week, then certainly after Draghi announces whatever he does in early December.

Interesting comment from Lagarde appears to make IMF decision on Yuan in SDR at the end of the month a high probability. One presumes the Chinese would make a decision to break the peg an inconspicuous period (? 2 months) after this. It will be interesting whether SDR will affect CNY or not. Conceivably they might use this to squeeze shorts, but this would make the magnitude of any peg break appear larger so why would they? SDR demand is via CB swaps, the SDR decision might actually bring shorts out of the woodwork to lay on their full positions. That said, there is a risk of a move to squeeze the other way, which is why there could be some waiting short interest until after the Nov 30 decision.

Anon 2.11You lost me as soon as you felt it necessary to express your opinion with "a beg to". This is the kind of submissive posturing that get you creamed in a fight, and this is a fight! Quoting Bush just confirms you do not understand my point ,because neither Bush did the job that needed doing. They thought 'winning' was to leave this region more or less intact. For clarity I would bomb the entire region back into the prehistoric age. Ironically to get there they don't have as far to travel has most.

LB "Parisians will learn to live with this, perhaps for a decade or more."

The Parisians agree with you. This was a anti Islam protest in Paris following the slaughter of Parisians. The Parisians mock the protesters and cheer when a protester is arrested

https://www.youtube.com/watch?v=kY5xHCa3PkU&feature=youtu.be

Maybe if they hit the Northeast or California they will run into armed Americans. Personally, I would let them have New Jersey on north, nothing good has come from that part of the country in 220 years.

I think the problem is quite simple to understand, but before it can be solved it needs to be acknowledged or identified. Which those in power are either incapable of or refuse to do, because it would probably violate their prevailing world view.

When liberty and freedom meets a authoritarian religion or other influential force, the latter will continue to expand at the expense of the former. Strong triumphs weak. Now it would be perfectly fine if the authoritarian religion doesn't want freedom, but unfortunately it wants that no one else have them either. To counter this and in order to maintain liberty and freedom, the status of the religion in relation to the state and society would need to be maintained clearly at a minimum. To not discriminate, this should affect all religions. Clear boundaries are needed. If you give a finger to a lion, then you might loose a hand and the problem will grow, naturally. You need to set limits to not raise a spoiled brat.

In fact, it's not even a religion, it's a complete set consisting a political system, educational system and a way of life. It will install itself in pieces and the old system will get trampled. This is what most people don't seem to get. Because it's part of personal freedom to practice a religion, right? Wrong. You might get the wonderful, liberal multicultural society which will last until it doesn't, because of the afore mentioned reason. Well if it gains popularity then it's all fine and well, but that means people living in the West are going to take a huge leap back in to the Middle Ages and reincarnation of Inquisition type events.

The other problem relating more directly to terrorism is that it's not just a "terrorist group" attack or infiltration we're talking about. It's about an infiltration of a sick idea which potentially has a favorable basis to grow due to demographics. Here's where flawed EU policies have contributed a bunch. No control of borders means no control over who's rushing through the door, so there's no idea of their intentions nor history. Now there's potentially thousands of recruiters for this so called idea in Germany alone and that's where the acute problem lies. Don't want to pin it entirely on the EU, but it really seems to be a major issue if you look at the so called leadership. Libbies call it populism and xenophobism or whatever, but facts always override terms like that. Look at Merkel, Cameron, Hollande or Juncker. That bunch doesn't care what's happening. If they don't care, it means their subordinates won't get proper tools or authority to best deal with the problem which is on an upward trajectory.

Specifically in this case the first step would be to get rid of those extremist imams and recruiters etc. which now get to do their thing rather openly. It might sound repetitive to boredom to blame the EU about everything but facts prevail. Years of ineptitude to set limits and rules extending to the future has and will continue to make things worse.

Schengen won't work as long as it doesn't have water tight external borders. The alternative is chaos spreading and reaching more physical boundaries in the ability to house migrants. If the outside pressure isn't reduced, it will brake down through a domino type effect, where one domino exerts more pressure on the remaining ones standing, thus forcing them to act as the next domino. Essentially as a result of flows having fewer and fewer places to go.

"Hollande views the tragedy that has befallen Paris as a summons to yet more war. The rest of us would do well to see it as a moment to reexamine the assumptions that have enmeshed the West in a war that it cannot win and should not perpetuate."

So just give up, await your fate and like LB stated, learn to live with it.

who gives a toss what anonymous say today, could you please choose a name as a token of respect if you have to voice an opinion on a VERY touchy matter where some folks have been extremely hurt? Thank you

my last FB on the 'world sorrow competition':

"To those who chose to not taint their profile photo in bleu blanc rouge, noone really cares what you do, since noone has monopoly on sorrow. Now when 5 of you already post this week-end about how hypocrite we all are, since we did not grieve for any Kenyan student last April, or any Syrian victim those last three years let me tell you there is just no time for controversy today and let me ask you to please shut the fuck up. We mourn the ones close to us. If we had to mourn every dead every where every day the world's dynamic would come to an end. Just shut up if you want no part in this élan de solidarité pour la France. Noone needs to be reminded about world misery when they have been hit really close. You should never dare to put's someone suffering in perspective. Thank you."

My best friend's husband is leading French airfare strikes in Syria. Second tour this year. They are taking a very big risk and naturally France became Daech most mortal enemy. France chose to go at war with them, following the US. So expect more attacks to follow.

Liberal socialists are to blame for these terror outrages. Why? Because they have fostered the conditions that support them. Under the law, aiding & abetting carries the same punishment as perpetrating the crime.

These liberal socialists have invited in terrorists, reduced the security forces' abilities to protect the population and endangered us all. After the terrorists have been destroyed, the liberal socialists should be removed next.

all these long comments ... just ego-feeding, so boring. lets keep it simple, short us govies like theres no tomorrow.and spooze? just leave it rolling over in peace till deece fed day. what about eur? lets leave it the pros: the club of rome is buying all your sell stops...

The intransigence of the EU to accept it has made a monumental mistake in its mass immigration policy will be its down fall. The people will have the final say regardless of their foolishness. Nationalism and the far right are Europe's only hope now.

Well, tell what the women and children of Beirut did to deserve their fate? Osama bin Laden got his urge to strike at the US from there according to the video tapes captured in Afghanistan. Finger pointing is easy for both sides in a conflict as both sides have blood on their hands and feel justified, but that is of little relevance for good policy. AQ had as it's policy to strike at the far enemy (aka the West) in order for them to stop supporting the close enemy (aka the Arab dictators). If you are involved you get hurt just ask the people of Yemen who gets killed by US drone strikes. What did they do to deserved that? Again finger pointing is easy but not good policy.

You simplify a conflict to black and white and hence you'll most likely just repeat the same errors as president Bush.

The key is what works.

As Barcevich argues convincingly military interventions fail. Why should a round two in Iraq plus Syria be different? Why fail again with the costs involved. France cannot alone do shit about IS in Iraq & Syria and the US just pulled out after having failed for 10 years... Do they want another decade of wasted American lives to IEDs etc. with nothing to show for it?

Also take a look on French policy. They want to topple Assad & Co but the only people left to take over are the ones who attacked in Paris. Religious extremists. So where is the good sense in that. Arab nations are not like European ones. The regime is the state. Remove the regime and the state disappears.

quote:"ISIS’s message is thus clear—the group is waging an all-out deliberate war against all those countries that are lining up to fight it. Again, this is not an attempt to take down the Western order, in the way that al-Qaeda was trying to do, nor is it a reaction to the evils of Western heathens. It is a direct reaction to what is being done to ISIS by coalition forces. ISIS is trying to weaken and divide the coalition into those countries that may now act more cautiously or even pull out of the coalition, and those that will stay and will continue to be targeted by ISIS. There is already evidence that the Arab Gulf countries—including Saudi Arabia, which has the largest air force in the region—have drastically reduced their contribution to the bombing campaign in Syria."